Colby Limited is a manufacturing company whose total factory overhead costs fluctuate somewhat from year to year, according to the number of machine$-$hours worked in its production facility. These costs at high and low levels of activity over recent years are given below:

Level of Activity

Low High

Machine$-$hours $61,50081,500$

Total factory overhead costs $ $34,589,500$ $ $39,049,500$

The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the $61,500$ machine$-$hours level of activity as follows:

Indirect materials $ $9,102,000$

Rent $17,200,000$

Maintenance $8,287,500$

Total factory overhead costs $ $34,589,500$

For planning purposes, the company wants to break down the maintenance cost into its variable and fixed cost elements.

Required:

Estimate how much of the factory overhead cost of $$39,049,500$ at the high level of activity consists of maintenance cost.

Using the high$$low method, estimate a cost formula for maintenance.

What total overhead costs would you expect the company to incur at an operating level of $66,500$ machine$-$hours?